1990 Annual Report

1989. A YEAR OF PROGRESS AND PREPARA TION
The past year was busy and productive for the research-based pharmaceutical industry-in
sales, in investment in research and development and in the public-policy area, where substantial progress was made on federal, state and international issues.
Worldwide sales reached 551.2 billion in WORLDWIDE SALES OF PMA MEMBERS
1989, up 9 percent from the preceding year. Sales *""$ Billions
57.4 60
in 1990 are expected to increase another 12 percent to $57.4 billion. 50so
During 1989, the research-based phar- 40
maceutical industry continued to invest more in
research and development than the National In- o
stitutes of Health spent on all biomedical research. 20
The industry invested $7.3 billion in R&D-up _ ___ _ _....o
from $6.5 billion in 1988. In 1990, pharmaceutical1
companies are expected to invest $8.2 billion in 1960 1965 1970 1975 1980 1985 1990*
research and development. Source: PMA Annual Survey *Estimated
The most significant development affect- $ Billions
ing the industry in the federal legislative area was R&D EXPENDITURES BY PMA MEMBERS.2
the repeal of the Medicare Catastrophic Coverage 8
Act of 1988, including the outpatient drug benefit.7
The industry had worked on the legislation for
two years and-after helping to improve the out4.1 5
patient drug benefit and make it financially 4.1
4
sound-fully supported the new drug program.
And then, within a year of enactment, the industry 2.0
watched as Congress, responding to the heated op- 2
position of Medicare beneficiaries to the method 1
of payment for the new benefits, repealed the Act. 1980 1985 1990*
PMAs primary focus in the federal area Source: PMA Annual Survey *Estimated
during the past year, however, was on proposals by Senator David H. Pryor (D-AR) to limit Medicaid
reimbursements for prescription drugs through the creation of a national restrictive formulary. The industry briefed Members of Congress and their staffs about the defects of Medicaid formularies, pointing
out that they result in second-class medicine for the poor and that-rather than saving money-they
may increase total Medicaid costs by 4 percent to 15 percent.
On other federal issues, both the Senate and House approved amendments to the Clean Air Act
that contained a provision supported by the pharmaceutical industry that would permit the Environmental
Protection Agency to separate emissions from research and development facilities from emissions from
contiguous manufacturing plants.
As in the past, PMA supported increased appropriations for the Food and Drug Administration
for Fiscal Year 1990 and opposed the imposition of user fees by the agency for processing New Drug
Applications. In both cases, Congress acted as PMA had recommended.

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